Seven years ago, Hurricane Katrina made landfall 65 miles southeast of New Orleans. Winds topping 100 miles per hour ripped across the city, while its outdated levee system suffered 53 breaches, slowly submerging three-quarters of the city. Floodwaters rose above eight feet in many low-lying areas. Most notoriously, breaches on the Industrial Canal wiped out a third of New Orleans’ port facilities and annihilated 14,000 houses in the Lower 9th Ward.
About 80 miles northwest, the Louisiana state capitol of Baton Rouge received minor wind damage and an initial influx of 100,000 hurricane evacuees and some 900 waterlogged corpses (a makeshift morgue was set up in St. Gabriel Parish).
Six months after the storm, New Orleans had lost two-thirds of its residents and some 95,000 jobs. Even discounting areas such as the Lower 9th, less than 35 percent of the city had electricity. Evacuated residents had been scattered across the nation and local planning about recovery was paralyzed by controversy and corruption.
Some commentators and residents darkly predicted that the region’s economy would move to Baton Rouge. Many feared New Orleans would become a snow-globe version of itself, its existence propped up by the French Quarter and Garden District, historic neighborhoods which had not flooded, while middle class residents and major port and engineering investment moved to the state capital. Katrina was comparable in devastation to the 1900 hurricane which practically wiped out Galveston, ultimately transforming what had been the largest city in Texas into an emaciated vacation town, while large-scale port and business activity moved 50 miles north to Houston, now one of the largest urban economies in the nation.
But the last seven years have given evidence of an even more unexpected development in New Orleans and Baton Rouge: The two metro areas have begun to work together.
The cities have historically had an antagonistic relationship: The bohemian, impoverished Latinate Catholic city of New Orleans scorning its buttoned-up, Protestant Anglo-Southern rival, which in turn dismissed New Orleans as corrupt, debauched and impossible to work with. But in reality, says Adam Knapp, CEO of the Baton Rouge Area Chamber, the two cities share the region’s strong seasonal culture, centered on family, food and an intensely interconnected economy — the sort of metropolitan region, as Bruce Katz and Jennifer Bradley of the Brookings Institution argued in a May Forefront story, poised to compete in a global economy.
“The realities of economic restructuring, global competition, fiscal pressures, environmental imperatives, technological possibilities and a dysfunctional federal government require new models of collaboration within and among metropolitan regions,” Katz and Bradley wrote.
In the case of Baton Rouge and New Orleans, it was recognition of shared environmental, infrastructural and governmental challenges that forced collaboration. When Katrina and Rita left both cities paralyzed, the need to work together could no longer be ignored.
“We did a survey in late 2005 of our region’s business community,” says Knapp, “and one of the more fascinating and surprising outcomes of that showed that 50 percent of business activity was down. The interconnection between Baton Rouge and New Orleans is significant, but previously no one had perceived the two economics as so deeply bounded together.”
In 2009 Knapp and Michael Hecht, CEO of the regional economic alliance Greater New Orleans Inc., created a committee for both metro areas to plan together as a “super region,” sharing a legislative agenda and jointly pursuing national and international business contracts. (In true Louisiana fashion, the two economic development specialists are cousins.)
Despite their shared interests, Knapp says the two cities have had opposite experiences of the post-hurricane years. New Orleans’ employment rate has been buffeted from the recession by massive federal investments for projects, such as improving the levees and the construction of a massive medical district. When all the money is paid out, these investments will total nearly $150 billion. But the city’s economy is still very much in recovery mode: It took until 2010 for the rebuilt and expanded port and shipping sector to regain its 2004 employment levels. New Orleans lost 13,000 jobs in tourism, its largest pre-Katrina sector. Though the city is a quarter smaller than pre-Katrina and still regaining population, the metro area as a whole has regained 90 percent of its pre-storm population, buoyed by an influx of contracting and construction jobs and Latino and Asian immigrants.
In addition to recovering from the massive destruction of Katrina, New Orleans is recovering from the disastrous mayorship of Ray Nagin, currently being federally investigated for corruption. The new mayor, Mitch Landrieu, elected in 2010, has set up a public-private business alliance that will pursue corporate investment and market the New Orleans’ strengths in similar fashion to the Baton Rouge Area Chamber.
The post-Katrina influx of resources and attention in Baton Rouge, meanwhile, dovetailed with the chamber’s aggressive initiative to court national corporate investment and shed Louisiana’s long-standing status as a corrupt, declining backwater. Between 2006 and 2010, the Baton Rouge Area Chamber’s initiative to attract and expand businesses created 6,757 jobs and generated $2.6 billion dollars in capital investment. (This was thanks in part to the pre-recession boom years; though government investment has offset it, New Orleans has to struggle with scarce post-recession capital.) The 2010 census revealed that metro Baton Rouge had crossed the 800,000-population threshold, putting it in league with regional markets such as Austin, Jacksonville and Nashville.
While New Orleans has racked up many accolades for its post-Katrina increase in entrepreneurship, non-profits and educated residents, Baton Rouge has quietly positioned itself as one of the South’s most stable, flourishing metro areas: Named the best metro area for new or expanded corporate facilities by Site Selection Magazine; named one of the best performing metro areas nationwide in recent studies by Brookings and the Milken Institute; named one of the best cities for young adults and ranked second in the country for highest per capita income growth by Portfolio.
Knapp and Hecht note that by combining and planning as a super-region with a population of 2 million, Baton Rouge and New Orleans will be positioned to compete with yet larger cities, even edging toward Houston, the most massive economy in the region and southeast Louisiana’s direct competitor for energy and chemical industry contracts. The ports of Baton Rouge, New Orleans and South Louisiana (located in Laplace, between the two cities and the largest in the nation by cargo tonnage) increasingly promote themselves as a combined force. A recent New Orleans Community Data Center study showed that more than 50,000 residents commute between Baton Rouge and New Orleans. This represents an 11-percent increase since 2004 despite New Orleans’ job and population loss, which suggests that the regional economies are merging in the wake of Katrina’s population shifts. The proportion of commuters is comparable to patterns in massive, intertwined metro regions such as Tampa and Orlando, Austin and San Antonio, and Cleveland and Akron.
In a global marketplace, where Southeast Louisiana participates in trade missions to Brazil and Panama to go after energy and shipping contracts, the old rivalries are increasingly considered a distraction from the combined strengths of both metro areas. “New Orleans has the brand: It’s one of the most beloved cities in the world,” Hecht says. “But Baton Rouge has the political wherewithal.” The super region committee has successfully lobbied the state to reform its moribund tax code, which taxed manufacturing equipment and the expansion of businesses. The committee is also pushing for education reform and successfully lobbied for path-breaking digital media and angel investor tax credits that incentivize tech-based entrepreneurship.
Both cities have attracted gaming companies and view this as friendly competition: In the long run, specialized knowledge economy workers are likely to commute across the region for the right job. Despite their visible cultural and historic differences, both metro areas are banking on the same industries to fuel a joint economic future: exports, hospitals, biomedical research, new media, the booming natural gas and attendant chemical industry.
The shifts in both economies — a more competitive profile in the South at large, massive post-Katrina federal investments and forward-thinking tax incentives — appear to have benefited both already. The parish centered on Baton Rouge gained 10,000 households in the last decade; Orleans Parish, meanwhile, lost nearly 72,000. But median incomes have increased by $10,000 in both Orleans and East Baton Rouge parishes. In East Baton Rouge Parish, there has been a 10-percent increase in households with incomes of $75,000 over the last decade; in Orleans Parish, that proportion has gone up by 5.5 percent. Gains are even more pronounced in some of the surrounding 17 suburban parishes.
Still, a steep hurdle remains for both New Orleans and Baton Rouge — undoing the legacy of entrenched intergenerational poverty that stalks both cities. Almost a quarter of residents of the city of New Orleans have zero or negative net worth. The survey of National Adult Literary suggested that in 2003, some 44 percent of adults in New Orleans were functionally illiterate. In Baton Rouge, the proportion is estimated to be 20 percent. In a May Pew study, Louisiana, along with Oklahoma and South Carolina, received the worst score of any state on measures of social mobility. In neither city have post-Katrina gains trickled down to these populations, with the most noticeable growth among workers in upper income brackets and little change in poverty levels with the poverty rate in both New Orleans and Baton Rouge the same as it was a decade ago — which is to say, abysmal.
Given Katrina’s status as the costliest hurricane in U.S. history and one of the deadliest, the recent economic ascendance of Baton Rouge and New Orleans is remarkable. As both cities plan in concert for Hurricane Isaac, residents and leaders were reminded of the devastation caused by Katrina — and the hard-won reforms and newly revivified economy. The work Knapp and Hecht to plan as a super-region promises to attract more business and skilled workers, entrench the region’s gains, and ultimately improve resident’s educational and economic opportunities. But the stains of the region’s longtime status as an educational backwater will take time and a great deal of effort to erase — and the uneven gains of the past seven years suggest that a rising tide does not necessarily lift all boats.